Standing Committee D

[Mr. Eric Illsley in the Chair]

Clause 57

Duty to seek comments of government department or other specified body

Amendment proposed [20 June]: No. 118, in clause 57, page 22, line 38, after ‘name', insert
‘and in the absence of the applicant receiving any response by the specified department or other body within 30 days of its receipt of such a request, the specified department or other body shall be deemed to have confirmed that it has no objection to the proposed name'.—[James Brokenshire.]

Question again proposed, That the amendment be made.

Eric Illsley: I remind the Committee that with this we are taking the following amendments: No. 119, in clause 57, page 22, line 43, after ‘received', insert
‘or include a statement that no such response was received within the time period referred to in subsection (2)'.
No. 120, in clause 57, page 23, line 6, after ‘received', insert
‘or must include a statement that no such response was received within the time period referred to in subsection (2)'.

Vera Baird: This is my first opportunity to welcome you to the Chair, Mr. Illsley, and to tell you how pleased I am that such an experienced Chairman will be presiding over my first attempt at helping a Bill through Committee.
The. Member for Hornchurch (James Brokenshire) had put forward his argument on the amendments. Under the clause, anyone who wishes to use a sensitive name in their company’s name must apply to the Secretary of State, but to support that application he must ask any public body or Department whose sensitive words he wishes to use in his name to comment on his application. The hon. Gentleman feels that if a public body does not reply to such a request within 30 days, the presumption should be that it does not object to its words being used.
I have already said how sympathetic I am to people who get held back by bureaucracy, but the point of the clause is to prevent people from being misled by a company having a name that wrongly suggests a connection with a public body. The amendment would change the balance of the clause. Where a person is looking for exceptional permission to be allowed to use these sensitive words, public protection remains the most important thing. The immediate mischief is that it would be possible to send in the application for a response in a way that made it unlikely to get one back, perhaps by sending it to the wrong part of the relevant organisation or by couching it in a long letter about something else.
Let me set out what I think is a greater mischief. The process in the clause is in two stages. First, the person who wants the name writes to the body that holds the words he wants to use. Then he sends any response that comes back to the Secretary of State. The words “any response” specifically envisage that there may be no response. That is clear. It is the Secretary of State who is ultimately responsible for approving the name, and although he would be assisted if there were a response from the public body, the lack of response under the terms of the clause is not fatal to the application.
We are talking about words like “charity”, “nurse”, “police”, “Her Majesty”, which it would be extremely advantageous for someone to use in their company title to try to show some connection with totally virtuous organisations. What goes a little further than the mischief I have described is if the application has been with the public body for 30 days, and there is automatically a deeming of no objection and therefore approval, it would be extremely difficult for the Secretary of State to refuse because the public body that the provision was trying to protect would have raised no objection and would have been deemed to approve. How could he differ from that and not be subject to judicial review for being unreasonable?
The consequence, I fear, is that as we are talking about a public body that has had the application for 30 days and not responded, it probably has not considered it and the Secretary of State will not be able to do so. Consequently, public protection from the mischief would be seriously challenged by such a deeming provision.
The other specific difficulty that could be envisaged is that although at the end of the 30 days no response had been received and the body was deemed to have approved, a long and detailed objection might be received the day afterwards from a public body to the proposed use of its name and the Secretary of State would not be entitled to take it into account. That would be most undesirable, bearing in mind that the purpose is to protect the public.
Those are good reasons to invite the hon. Gentleman to think again. We hope that he will feel able to withdraw the amendment. I repeat that the Government will not tolerate bureaucratic inefficiency. Public bodies will be expected to respond as quickly as they realistically can. None the less, the emphasis has to be on protecting the public and not on facilitating people skilfully to get around the provision.

Keith Vaz: Does the Minister know how long it takes for public bodies to respond? What gave rise to the concern that made the provision necessary?

Vera Baird: I am grateful to my hon. Friend for raising that point. I understand that it is a completely new provision, and I invite the Opposition to comment on it. However, it was not supported or buttressed by any pressure group—not by the Law Society or the Institute of Directors, the company secretaries of major companies or any list of people who might have been expected to respond if it was likely to be a problem. It is not clear to me where the thrust of the provision is coming from, and we have not received any submissions.
I shall probably serve the Committee better by setting out other words that could be sensitive—words that could imply national or international pre-eminence. For instance, the word “British” will need a significant amount of protection, and I see that Opposition members agree. Approval of that word in a company name would depend on how it was to be used. The Secretary of State would normally expect the company to be British owned—a realistic thing to think—and it would probably be necessary to show that the company was pre-eminent in its field in order to merit that epithet and description. The company would need to show that it was pre-eminent by providing supporting evidence from an independent source, such as a Department or trade association.
The same goes for the words “English” and “England”, and “Scotland” and “Scottish”. “Wales” and “Welsh” would probably fall into the same category. It would be hard it distinguish them in any realistic way from “British.” The same applies to “Ireland” and “Irish”. If a company wanted to use one of those words as a prefix to its name, similar conditions would have to apply as apply to the word “British”, and approval would have to be given for such use. The same would apply if the word were used as a suffix.
It will usually be possible to get approval only if the person can show that the company has its main business in the country concerned. It would be rather odd for a company to call itself “Welsh” if its factory was in my constituency of Redcar. I cannot think of a company in Redcar with “Welsh” or “Wales” in its name; that was just an example of how curious it would be.
One cannot rule out, however, the chance that somebody might want to use the word “Welsh,” perhaps to describe Welsh cakes or something of that kind, even if they are not made in Wales, but I imagine that one would have to go a long way before being able to register “Welsh” in the name of a company, if the business was in Redcar, or in the constituency of the hon. Member for Reigate (Mr. Blunt). For instance, in Reigate, it would be odd to call a company “Welsh”.

Crispin Blunt: I am extremely grateful to the hon. and learned Lady for replying comprehensively to the amendments. However, I am slightly concerned that if Ministers are going to go into such exquisite detail, the Committee will struggle to get through the thousand or so amendments that we are likely to consider, as well as the 925 clauses.

Vera Baird: I know that the hon. Gentleman rightly, and compatibly with his job, has his hands on the accelerator and brakes in the Committee. I can assure him that I am quite succinct sometimes.

Margaret Hodge: Does my hon. and learned Friend agree that we would make better progress if so many amendments were not identical to those discussed in another place? They were given considerable airing there, and little value is added by reconsidering them.

Vera Baird: As ever, my right hon. Friend makes a strong and important argument.

Paul Farrelly: I want to welcome the new approach outlined by the Opposition. Will my hon. and learned Friend join me in hoping that, throughout the course of the Committee, Opposition filibustering, nay hair-splitting, will be kept to a minimum?

Vera Baird: Hair-splitting sounds like a cruel sport.

Keith Vaz: To take us back to the substance of the Under-Secretary’s comments, she made an important point about names because it causes a great deal of concern. Have Ministers seen any evidence of abuse by a company registering as British, with the word “British” in its name, but which subsequently was discovered not to be British, and to have no such connections, such as the fictional Welsh company in Redcar?

Vera Baird: I hesitate usually to express personal opinions, but it might be an abuse of the term “Welsh” if the company were in Redcar. As I have already mentioned, however, I do not think that there is such a company in Redcar. None of my constituents, or anyone linked with them, bear any responsibility for the misuse of the fine name of Wales. I shall tell you about my Welsh antecedents in a moment.

David Jones: I am grateful to the Under-Secretary for allowing us to discuss the manufacture of Welsh cakes in Redcar. Will she comment on the possibility of a company obtaining registration to manufacture Eccles cakes in my constituency? Would they run into difficulty?

Vera Baird: My goodness, that is a shrewd point, and I hardly know how to deal with it. I believe that Eccles cakes are usually made in Eccles, but I am not sure where that is. [Interruption.] I am told that it is near Salford.

Justine Greening: I think that we have a similar situation with Pontefract cakes. They are made all over Yorkshire and enjoyed by many people. Perhaps the hon. and learned Lady will consider that alongside the Eccles cakes.

Vera Baird: And the Welsh cakes, although I am not sure that I know what a Welsh cake is. Can anybody assist?

Eric Illsley: Order. We seem to be straying a little away from the amendment, in that Pontefract cakes are Pontefract cakes and Eccles cakes are Eccles cakes—they are not companies, they are products. Let us return to the amendments—all of which were selected by me, all of which are in order and all of which appear on the order paper—and, of course, there will be no filibustering.

Vera Baird: I am very grateful. I have indicated already, Mr. Illsley, how fortunate I am, on my first attempt to present a Bill in Committee, to have such a fair and firm Chair. Let me return to the words “English”, “Welsh”, “Scottish” and “Irish”. Although I do not want to tempt Opposition Members into too much of a frenzy, I should have thought that the word “European” might have to be equally protected. I am not sure whether they would agree with that. Names that include the word “European” would not normally be approved if they unjustifiably implied a connection with official bodies in the European Union. If there is a genuine connection with an official body, the name might—if the body supports the application—be a perfectly realistic one to use. It would be a question of getting support. In that and all other situations, I envisage that the support from the public body would have to be expressed rather than deemed, as the amendment would require it to be.
The same can probably be said about “Great Britain” and “the United Kingdom”. Presumably, one would use those expressions as a prefix, although I imagine that “Eccles Cake Company of the United Kingdom” might add kudos to the manufacturer of such cakes, as one likes to think that they are made in Britain, even if not in Eccles; I do not want to be unduly nationalistic. The question is whether there is a genuine connection with the official body and, if so, whether that body takes exception to the application to the extent that it is prevented from actively supporting the applicant or permitting him to successfully incorporate into his company the name that he requires.

Crispin Blunt: On a point of order, Mr. Illsley. We really are going to struggle to get through this Bill if we continue at this pace. Can you give the Committee any assistance?

Eric Illsley: At the moment, no. While the debate is in order and the Minister is in order, the debate has to continue. I am sure that the speakers have taken on board what the hon. Gentleman has said.

Vera Baird: I was about to give way to my hon. Friend the Member for Leicester, East (Keith Vaz).

Keith Vaz: Presumably, if the term “European” were to be used to describe a company, it would be the European Commission that would make the objection. Would it be subject to the same time limits as a public body in this country?

Vera Baird: That is right. My hon. Friend may have put his finger on why, given that a time limit is probably inappropriate anyway, 30 days would be too short. We are to look at the list of possibilities, each of which makes a point against the amendment. Sending an application off to the European Commission with a dead time limit of only 30 days, after which it is deemed to support the application, is highly likely to produce a lot of litigation and confusion. In respect of the way in which business is conducted, it will create many of the problems that we are trying to exclude, because in a period as short as 30 days there will inevitably be non-responses from an organisation as big and as wide-ranging as the European Commission. The hon. Gentleman makes a very powerful point against the amendment, and I hope that I have made one or two myself.
Would the EC be the appropriate body? I am being given some helpful advice, which suggests that an application for the word European would not necessarily have to be sent to the Commission for approval. However, it does seem realistic that the Secretary of State would be bound to want to consult the European Commission, and arguably other bodies, if there were a serious suggestion that somebody’s company was of a sufficient status to justify calling it “European”. I am grateful to my hon. Friend for that point, and I am glad that he raised it just as I was moving on to consider the word “international”.
If one wants to use the word “international” as a prefix, one will probably have to show that the major part of the company’s activities is trading overseas. It is difficult to imagine what public body or bodies could be consulted to get approval of the word. There must be a large number of public bodies—I do not have a specific number in mind—that are international as part of their way of being and would therefore be able to express a view. Such bodies might take serious offence at having to give approval, and they might not want the kudos of the word “international” to be attached to some embryonic company dealing in Eccles cakes. The word suggests a major undertaking that operates across borders and has been working for some time to get such a status. It gives a false picture if a company is small, not international and operates only in Wales.
I am helpfully told that not all the words in the list of sensitive words have an automatically identifiable body whose views would be required. In a case such as the word “international” it would be hard to pin down which were the right bodies; the Secretary of State would simply have to consider the arguments for and against the registration. It might be easier, however, to consider the appropriate public bodies to be approached if the word “national” were used. That is the next word on the list of sensitive words that would fall under the provisions of the subsection. The criteria for the use of the word “national” for a British company would resemble those for the word “British”. If a British-registered company is called “National something” it implies heavily that it is British and has a certain status in the country.
One would hesitate to allow the use of the word “national” to a company operating in a small way, perhaps on one of the excellent industrial estates that have grown up thanks to the stabilising of the economy and the advent of regional development agencies, for instance in the north-east, where industry is beginning to take off again after all the years of decline in the steel and chemical industries. Happily, both of those are now secure. Such a company, perhaps supported by one of the excellent regional development grants or buttressed by EU moneys to help it get off the ground but operating only in a small way, would have inappropriate kudos attached to it if it were entitled to use the word “national”. There must be a careful screening process.

Keith Vaz: What my hon. and learned Friend is saying is extremely helpful and will be important to companies wishing to register such names. Is it likely that officials acting on behalf of the Secretary of State will have a list of the organisations to which they will write when such names are proposed, but that the list will not be exhaustive in case other organisations emerge as needing to be written to?

Vera Baird: I am not sure whether there is likely to be a comprehensive list: as my hon. Friend suggested, it might be difficult to formulate one. As he has also observed, such a list would be fixed in time so that any new developments could not be accounted for. It is clearly important that the Secretary of State should have a list of sensitive words and names that need to be protected. I am going through some now, which, in my view, have a powerful claim to fall into that category and to be protected by the subsection.
There are words that probably also imply some business pre-eminence, or a representative status. I further understand that the regulations specify bodies in relation to particularly sensitive words; however, in the case of some sensitive words on a list such as the one referred to by my hon. Friend there would be no associated body. He is I think correct in saying that the regulations specify a list of sensitive words with a link to bodies. Clearly, there is likely to be an alarm-triggering system for sensitive words that might, without having an association to a body, still create a false impression in relation to the status, nature, age, capitalisation or spread of the business of one of the relevant companies.

Keith Vaz: The thing that will really cause people concern is the use of the word “royal”, or any connotations of association with the Crown. Many people who set up companies would want to trade on that name to further their business. Shall we have very strict criteria for dealing with those important words, which, if adopted, would confer a great deal of kudos on companies?

Vera Baird: Let me just deal quickly with the words “association”, “federation” or “society”. A company wanting to use one of them would normally be limited by guarantee.

Crispin Blunt: I know that the hon. and learned Lady will be as embarrassed as anyone else at what she is having to do. May I suggest, having done my best to listen to her arguments, that she should accept the amendments on behalf of the Government and, if the Government then think that it is appropriate to revisit the matter, return to it on Report, when there has been a chance to examine it? If we go on examining it at this length, we shall bring the Committee into serious disrepute.

Vera Baird: I am not in a position to accept the amendment. I think that I have made pretty forceful arguments against it and I hope that the hon. Gentleman will be persuaded to withdraw it. I must carry on, to try to meet the thrust of the hon. Gentleman’s argument—although he was able to put it more succinctly than I can reply to it. I do not feel embarrassed, so the hon. Gentleman is wrong.
As I was saying before the intervention, a company wanting to use one of the words in question would normally be limited by guarantee. Each member would have one vote and the constitution would contain a non-profit distribution clause. Such protection would be required before words of the kind in question could be used for a company limited by guarantee.
I have run through but a few of the many examples on the pages in my hand of words that might be used that would hit the sensitivity button.
Mr. Bluntrose in his place and claimed to move, That the Question be now put, but The Chairman withheld his assent, and declined then to put that Question.

Eric Illsley: It is too early in the debate, although it does not seem like it.

Vera Baird: I was grateful for that suggestion. I will take it and say that I have completed my argument.

James Brokenshire: I am grateful to the Minister for her response. While I was in mind of “Test Match Special” and the late Brian Johnston on certain occasions during her contribution, I listened with care to what she said. The main thrust of her argument is about whether a misleading situation could be created. I believe that that issue is addressed in clause 76, which gives the Secretary of State power on that type of provision. Therefore I want to test the Committee’s view on the amendment and put it to a vote.

The Committee divided: Ayes 9, Noes 9.

Question accordingly negatived.

Clause 57 ordered to stand part of the Bill.

Clause 58

permitted characters etc

Question proposed, That the clause stand part of the Bill.

James Brokenshire: The clause gives the Secretary of State new powers to restrict what letters and symbols may be used in the company’s registered name and to specify a permitted format for a name. It is a new provision and is not contained in the 1985 Act. I would be grateful if the Minister clarifed why it was felt that the additional clause was needed. I would also be grateful if she set out the potential problems that the Government seek to address and what marks and symbols she has in mind for the subsequent regulations.

Vera Baird: The clause provides power to make regulations that specify the characters that can be used in a company’s registered name. The primary purpose of the restriction of the choice of name is to make it easy for the public to find information about the company on the record. Names that use unfamiliar characters, such as those drawn from oriental languages, or that begin with a string of characters that are not letters apparently create confusion. They are difficult to remember and difficult to find in an index. So, regulations made under the clause would be of great assistance to people looking for information about companies. The restriction on choice would impose no cost on companies.
We will consult on the use of the power. That may reassure the hon. Gentleman. We intend to use it to specify all the letters used in the official languages of the European Union and the most familiar other characters such as currency symbols, punctuation marks and, perhaps, the first few characters in a name might be put in the regulations. It will also be possible to restrict the formatting used in the name as registered. That would not affect how companies display their name, so the use of things such as superscript, subscripts, exotic font, mixtures of capital and lower-case letters—and even names with their characters arranged in a circle—would not be affected by the regulations. The point is that the regulations will not make any difference to logos.
Why have restrictions? That is the thrust of the hon. Gentleman’s question. At present, they are none, but Companies House is apparently coming under increasing pressure to accept names and characters that it does not have the technology to handle, and the time has come for company law to provide a power to restrict the characters that are used. Such regulation is not unnecessary, because it is important to distinguish between a company’s registered name and a trade mark. There are no property rights in a registered name, which is only an identifier, so obliging companies to go through this process really is not much of an imposition. One might ask why companies should not be allowed to use whatever names they want. However, there will be no such restriction, because companies are not required to use their registered names in the course of business in any event. 
I hope that that satisfies what I guess is the hon. Gentleman’s curiosity about the need for the provisions, and the point is, indeed, interesting. With that, I hope that hon. Members will agree that the clause should stand part of the Bill.

James Brokenshire: I am grateful to the Minister for that explanation of the background and the requirements associated with the clause. In the light of her comments, I recognise the need for the provisions. My comments were really intended to gauge the background and to gain a full understanding of the requirements, and I made them in the spirit of seeking to avoid additional regulation where it is not required. However, I have listened carefully to the Minister’s comments about the problems that Companies House faces in dealing with new names and about the way in which things are changing, and I shall not be questioning the inclusion of the clause in the Bill.

Question put and agreed to.

Clause 58 ordered to stand part of the Bill.

Clause 59 ordered to stand part of the Bill.

Clause 60

Private limited companies

James Brokenshire: I beg to move amendment No. 124, in clause 60, page 23, line 34, leave out subsections (1), (2) and (3) and insert—
‘(1) Subject to section 61, the name of a limited company that is a private company must end with “limited” or “ltd” or, in the case of a Welsh company, its name may instead end with “cyfyngedig” or “cyf.”.'.

Eric Illsley: With this it will be convenient to discuss amendment No. 125, in clause 60, page 24, line 1, leave out from ‘companies' to end of line 3.

James Brokenshire: The clause requires that private limited companies use a particular suffix to denote their status, and the amendments are intended to simplify it. In the days when I was learning how to draft contracts and other legal documents, I was always told not to use three words when one would do. Applying that logic and that adage to the clause, I wonder why we should use three subsections when one will do, particularly when the Bill is intended to simplify company legislation and slim down what might otherwise be an excessive burden of regulation. Amendment No. 124 is largely a drafting amendment to give effect to that approach.
Amendment No. 125 is slightly different. Although I welcome the introduction of greater cross-referencing in the Bill, I do not welcome the fact that it sometimes adds confusion. Subsection (4) says that the clause
“does not apply to community interest companies”,
but then invites the reader to see certain sections of the Companies (Audit, Investigations and Community Enterprise) Act 2004. That leaves the reader in some confusion as to whether community interest companies are caught or not. Amendment No. 125 would make the position definitive, but if it is not acceptable to the Minister, I hope that she will consider an alternative formulation of subsection (4) to ensure that there is some clarity about the scope and ambit of the clause.

Vera Baird: The existing clause is a very clear statement of the requirement for a private company’s name to end in the appropriate statutory indicator of its status. The formulation is the same as that in the previous clause, which applies to public companies’ names. I hesitate to agree to an amendment that just restates the existing clause, which is what it does. I can compete with the hon. Gentleman on the verbiage point; personally, I find the hon. Gentleman’s sentence of 38 words less easy to understand than three sentences of no more than 17 words. I hope that he is persuaded that I have the trump card, that there really is not much point in amendment No. 124, and that he should withdraw it.
On amendment No. 125, I can almost see the hon. Gentleman’s point, but not quite. As he says, all that it does is to remove the cross-reference to the Companies (Audit, Investigations and Community Enterprise) Act 2004. It does not change the position at all; it just deletes a useful cross-reference. Since the provision in the 2004 Act requires the name of a community interest company that is not a public company to end in CIC, I would have thought it quite useful, at this point of the Bill, to have a pointer across to another piece of legislation. I am a bit hopeful that I have persuaded him to withdraw that amendment, too.

James Brokenshire: I thank the Minister for her comments, and although I hear what she says, there is the risk of some confusion; that is why I tabled amendments Nos. 124 and 125. However, given the time and the need to move on to other—perhaps more pressing and significant—matters, I shall not put my amendments to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 60 ordered to stand part of the Bill.

Clause 61 ordered to stand part of the Bill.

Clause 62

Continuation of existing exemption: companies limited by shares

James Brokenshire: I beg to move amendment No. 58, in clause 62, page 25, line 2, leave out
‘, or any return of capital,’.
We return to an issue originally highlighted in the other place. Although I heard the comments made by the Minister for Industry and the Regions about returning to issues that were debated in another place, it is valid for this Committee to examine issues and ensure that the right conclusions were reached. It is our duty and responsibility to hold the Government to account, so I feel no compunction at all about raising issues on which there may have been some debate in the other place.
The clause makes provision for certain companies to continue to use a name that does not end with “limited” or any other permitted alternative. The clause sets out certain conditions, the first of which is that the object of the relevant company must be the promotion of certain things, such as art, science, religion or charity. There is a further requirement for companies’ articles to include certain provisions, including the prohibition of payment of any dividends and of any return of capital to its members. In the other place, my noble Friend Lord Hodgson rightly pointed out that the requirement prohibiting a return of capital is new and departs from the provisions of section 19 of the Companies Act 1985. That means that some companies would be required to change their articles to maintain compliance with the expanded requirement.
Although I recognise that there are very few companies still benefiting from a licence under section 19 of the 1985 Act, I was not persuaded by Lord McKenzie’s reply, in which he mentioned the deregulatory nature of the clause, as it seems clear that the companies concerned will be obliged to change their articles if they are to continue to rely on the clause. That may now be easier, as exempt companies no longer need to apply to the Department of Trade and Industry for approval when they amend their articles, but it is slightly peculiar to suggest that that is deregulatory, when the relevant companies will be required to take positive steps to retain their status and will potentially incur cost and expense.
Lord McKenzie said in Grand Committee that the change was justified
“to ensure that exempt companies do not act in a way that is inconsistent with their status”.—[Official Report, House of Lords, 30 January 2006; Vol. 678, c. GC51-52.]
Could the Minister give an example of an exempt company that has used its powers inappropriately? If not, why is an additional burden being placed on a small group of companies? Amendment No. 58 would delete the reference to the return of capital to bring clause 62 in line with section 19 of the 1985 Act.

David Howarth: I just want to comment briefly on this amendment. I have had a great deal of sympathy with the Conservative amendments so far, but I have a problem with this one, and I ask the hon. Gentleman to reply to the following point in his closing remarks.
The clause is in line with a basic principle of company law: the protection of creditors. If a company has the word “limited” after its name, that puts potential creditors on notice that they might not get their money and they cannot pursue shareholders for it. It is at least arguable that a company that can return capital is one that puts at risk the creditor’s position. Therefore, it is reasonable for the clause to stand as it does, because it is protecting potential creditors from that particular possible abuse, although to a small extent only, because there are not many of these companies. I recognise that it will not be a very important matter in practice, but in theory this is the right thing to do.

Vera Baird: I am grateful for that thoughtful contribution made by the hon. Gentleman on behalf of the Liberal Democrats. He is correct to say that the clause runs with the grain of company law generally. Apparently, it is likely to affect 21 active companies—that is the number I have been told—which represents a small group, because most not-for-profit companies that are exempt from the requirement to have the word “limited” are companies limited by guarantee.
Under the Companies Act 1985—the present legislation—none of those 21 companies can return capital to their members, because they do not have the authority in their articles to do so, and they cannot change their articles without consent from the DTI. However, under part 19 of the Bill, it will no longer be necessary for companies’ articles to authorise reductions of capital or to authorise companies purchasing their own shares. Furthermore, exempt companies will no longer need to apply to the DTI for approval when they amend their articles, although the Bill ensures that, as at present, companies limited by shares exempt from the requirement for their name to end in “limited” may not return capital to members. I broadly embrace the point made by the hon. Gentleman that to allow them to do so would be wholly inconsistent with the grounds for the exemption. The amendment would remove exactly the safeguard that he has pinpointed.
I suppose that it is a sort of trade-off. The company’s articles cannot allow it to do inappropriate things with its money, so just as it is inappropriate for not-for-profit companies to pay dividends it is inappropriate for them to return money to their shareholders in other ways, for instance by buying back the shares. There is a clear and strong purpose for this provision to remain as it is, and I invite the hon. Member for Hornchurch to withdraw his amendment.

James Brokenshire: I thank the Minister and the hon. Member for Cambridge (David Howarth) for their comments.

Vera Baird: I owe the hon. Member for Hornchurch an apology, as he asked me whether there was an example. There is not, because there is no power to return capital at present without provision in the articles so the situation never arises.

James Brokenshire: I am grateful to the Minister for that explanation of the rationale for this particular change in the law, which did not come out as clearly as it might have in the reading of the debate in the other place. I am also grateful for the clarification provided by the hon. Member for Cambridge. We raised this point to ensure that we were not entering into regulation where it was not required, particularly, as the Minister rightly said, because we are talking about only 20 companies. I know that a small number only would potentially be affected by this provision, but this is about ensuring that, in dealing with this type of problem, we are not using a sledgehammer to crack a nut. In light of the Minister’s comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 ordered to stand part of the Bill.

Clause 63

Continuation of existing exemption: companies limited by guarantee

James Brokenshire: I beg to move amendment No. 59, in clause 63, page 25, line 26, after first ‘its', insert
‘profits (if any) or other'.
I shall be brief. Clause 63 tracks section 30(3)(b)(i) of the Companies Act 1985, except for the words
“profits (if any) or other”.
In another place, Lord McKenzie said that he had received advice from officials that the term “income” was sufficient to cover profits. Even though I am a lawyer, I do not wish to promote arcane debates unnecessarily, but there seems to be a difference. I think that there was some doubt in the mind of Lord McKenzie at that stage. In Grand Committee he said that he had doubts and would give the issue more thought. I wonder whether the Minister has given the matter more thought and come to a different conclusion.

Vera Baird: It is true that the extra words are in the 1985 Act, but where appropriate the Bill uses clearer and more succinct wording. The policy is that the companies to which the clause applies should use all the money they have available in promoting their objects, and it is our considered view—even our reconsidered view—that the word “income” is sufficiently general in the context to cover moneys received on the sale of assets, for instance. Indeed, it is better, because on a sale of, say, land, we would want all the money from the sale to be applied to a company’s charitable or similar purposes, not just the capital profit element.
My noble Friend Lord McKenzie wrote to Lord Hodgson on the subject. A copy of the letter is in the House Library and I will supply one to the hon. Gentleman if he would like. I apologise that that has not been done already. Lord McKenzie said:
“A company’s profit (or loss) for a financial year is the result of deducting expenses and other losses from the income of the company, i.e. it is a net figure. Take for example a profit on disposal of a fixed asset. FRS 3 defines this as ‘...the difference between the net sale proceeds and the net carrying amount, whether carried at historical cost (less any provisions made) or at valuation’. We do not think it is appropriate to restrict the duty to use money to promote the company’s objects to this net figure. The policy is that all the money from the sale should be used to promote the objects of the company”.

James Brokenshire: I am grateful for the Minister’s clarification and her offer to supply that letter. In light of her comments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 63 ordered to stand part of the Bill.

Clause 64

Exempt company: restriction on alteration of articles

James Brokenshire: I beg to move amendment No. 126, in clause 64, page 25, line 36, leave out ‘section 62 or 63' and insert ‘section 61(1)(c)'.
This is a technical amendment relating to cross-referencing. In clause 64(1), reference is made to exemption from using the name “limited” being granted under clauses 62 or 63. From my reading of the clause—I would be grateful if the Minister would correct me if this is not the case—it would seem that the operative clause is clause 61, as clauses 62 and 63 merely state conditions that are required to be met in order to satisfy clause 61. Accordingly, amendment No. 126 confirms that exemption is granted by virtue of clause 61(1)(c).

Vera Baird: I think that we can all agree that the Bill should be as clear and accessible as possible. However, I do not think that the amendment adds to the clarity because the drafting makes the position reasonably clear. The restriction on changing the articles imposed by the clause applies to companies of the kinds described in clauses 62 and 63. I would venture to suggest that the existing wording makes it rather plainer than the suggested alternative. However, I am grateful that the issue has been raised as it meant that I read the sequencing again. I am satisfied that it is right as it is drafted.

James Brokenshire: I am grateful to the Minister for that comment. I think that she used the words “getting it nearly right”, or something along those lines. I apologise if I misquote her. I should like to get the clause as right as we possibly can. Although I hear what she said about being satisfied that it reflects the situation accurately, I ask her and her team to give it further thought. I would rather not press such an issue to a Division, but I should be grateful for some further reflection. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 101, in clause 64, page 25, line 40, leave out ‘alter' and insert ‘amend'.—[Vera Baird.]

Clause 64, as amended, ordered to stand part of the Bill.

Clause 65

Power to direct change of name in case of company ceasing to be entitled to

exemption

James Brokenshire: I beg to move amendment No. 127, in clause 65, page 26, leave out lines 44 and 45.
Clause 65 deals with a situation in which a company is no longer entitled to rely on an exemption permitting it to dispense with the word “limited” or an appropriate equivalent in its name. The clause gives the Secretary of State the right to give the relevant company a direction in writing—we shall return to this later—to change its name so that it ends with “limited”.
Subsection (3) states that a change of name to give effect to that requirement
“may be made by resolution of the directors.”
That is a departure from the normal approach, whereby a company changes its name by special resolution of its members, but reflects the existing regime under section 31 of the Companies Act 1985. However, the Companies Act did not see the need for the additional language that my amendment seeks to delete. The use of the words
“a change of name...may be made”
makes it clear that it is not an exclusive route and that a change of name by other means would still be allowed. Accordingly, I think that the additional words are otiose and can be safely deleted with the intent of slimming down this very large Bill.

Vera Baird: The amendment would create uncertainty, and the sentence that it seeks to delete is necessary. The company will be able to comply with a direction to change its name more quickly if the directors can change the name, as clause 65(3) provides, rather than having to go through the rigmarole of a special resolution.
The words that the amendment would remove will prohibit the change from being made by a special resolution, for instance. The clause says:
“A change of name in order to comply...may be made by resolution of the directors”,
but that is
“without prejudice to any other method”
of doing it. If we remove that, does it not become the case that it can only be done in that way? However, I see the argument that the word “may” is important in that context.
The amendment would remove the alternative methods of changing a name, and we want them to work for purposes of compliance with a direction. We shall come later, during debate on another amendment, to the point of principle whether a change of name should generally occur by special resolution, but the Government suggest that that part of the clause is important and that its removal would generate uncertainty. I invite the hon. Gentleman to withdraw the amendment.

James Brokenshire: It sounds as though we are straying into a debate on “may” versus “shall”, which was debated in a different context in the other place. The word “shall” would have excluded other means of changing a name, whereas the word “may” is permissive and will not exclude, for example, the use of a special resolution. However, I hear what the Minister has said. In the interest of proceeding to other matters, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 65 ordered to stand part of the Bill.

Clause 66 ordered to stand part of the Bill.

Clause 67

Name not to be the same as another in the index

James Brokenshire: I beg to move amendment No. 129, in clause 67, page 28, line 16, at end insert—
‘(6) Nothing contained in this section shall prohibit or inhibit an objection under section 70.'.

Eric Illsley: With this it will be convenient to discuss the following: Clause stand part.
Amendment No. 130, in clause 68, page 28, line 22, leave out from ‘names,' to end of line 23.
Clause 68 stand part.
Amendment No. 131, in clause 69, page 28, line 42, after ‘be', insert ‘in writing and'.
Clause 69 stand part.
Amendment No. 132, in clause 70, page 29, line 18, after ‘name', insert ‘or incorporates a name'.
Amendment No. 133, in clause 70, page 29, line 19, after ‘goodwill', insert ‘in the United Kingdom'.
Amendment o. 134, in clause 70, page 29, line 22, after ‘applicant', insert
‘provided that the applicant was using such name in the United Kingdom at that time.'.
Amendment No. 135, in clause 70, page 29, line 23, at end insert
‘within twelve months of the company's registration with the relevant name'.
Amendment No. 252, in clause 70, page 30, line 2, after ‘upheld', insert —
‘(i)'.
Amendment No. 253, in clause 70, page 30, line 5, at end add
‘or
(ii) if the activities of the company using the registered name would be likely to deceive members of the public or to cause loss or damage to persons dealing with the company.'.
Amendment No. 136, in clause 70, page 30, line 6, at end insert—
‘(6A) Without prejudice to the foregoing provisions of this section, in the event that all of the circumstances contemplated in subsection (8) are satisfied, an applicant may apply to a company names adjudicator for an interim order under this subsection.
(6B) The circumstances referred to in subsection (7) are that—
(a) the applicant is a company whose shares are listed on a regulated market;
(b) the applicant has published a circular to shareholders incorporating a resolution proposing to change its name to a particular name (a “relevant name”); and
(c) a company (the “respondent”) has been incorporated with the relevant name or changed its name to the relevant name in either case on or after the date of publication of the circular referred to in subsection (8)(b).
(6C) If an application for an interim order is made and the adjudicator is satisfied that the provisions of subsection (8) are satisfied, the adjudicator shall make an order requiring the respondent to change its name to a name specified by the adjudicator.
(6D) The adjudicator must give notice of his interim order—
(a) to the applicant;
(b) to the respondent; and
(c) to the registrar.
(6E) Upon the presentation by the applicant to the registrar of an official copy of the interim order together with all other documents contemplated by section 78 (Change of name by special resolution), and the registrar is satisfied that—
(a) the relevant name complies with the requirements of this Part, and
(b) the requirements of the Companies Acts and any relevant requirement of the applicant's articles, with respect to a change of name are complied with,
the registrar must enter the relevant name as the new name of the applicant and enter the name set out in the interim order as the new name of the respondent on the register in place of the former names of the applicant and respondent respectively.
(6F) On the registration of the new names, the registrar must issue a certificate of incorporation to each of the applicant and the respondent altered to meet the circumstances of the case.
(6G) The making of an interim order shall be without prejudice to any other legal rights of the applicant or respondent or any application by the respondent under subsection (1).'.
Amendment No. 137, in clause 70, page 30, line 7, after ‘section', insert ‘and in section 73'.
Amendment No. 60, in clause 70, page 30, line 7, at end insert—
‘(8) In this section “start-up costs” shall be considered “substantial” in relation to the annual revenue and assets of the company.'.
Clause 70 stand part.
Amendment No. 138, in clause 73, page 31, line 20, after ‘application', insert
‘other than an application for an interim order'.
Amendment No. 264, in clause 73, page 31, line 20, leave out subsection (1) and insert—
‘(1) If an application under section 70 is upheld, the adjudicator shall make an order, either—
(a) requiring the respondent company to change its name to one that is not an offending name, and requiring all respondents—
(i) to take all such steps as are within their powers to make, or facilitate the making of that change, and
(ii) not to cause or permit any steps to be taken calculated to result in another company being registered with a name that is an offending name, or
(b) requiring the respondent company to undertake to the applicant and to the Secretary of State not to operate under the registered name in connection with such activities as may be specified in the order.'.
Amendment No. 139, in clause 74, page 32, line 6, at beginning insert
‘Other than in the case of an application for an interim order,'.

James Brokenshire: I shall speak to amendmentNo. 129 and all the amendments that are grouped with it as they largely relate to the mechanism for objecting to a company’s name under the new procedure set out in clause 70 onwards. I shall also make some more general points about clause 70 as part of the stand part debate.
Clause 67 states at the outset:
“A company must not be registered under this Act by a name that is the same as another name appearing in the...index of company names.”
It then states:
“The Secretary of State may make...regulations supplementing this section”
so that certain words, symbols, signs and other matters can be disregarded for purposes of the section, and so that
“registration by a name that would otherwise be prohibited...is permitted”.
I am concerned that the Secretary of State’s approval of a name by virtue of this clause could be seen to override the rights, or question the ability of another person to have such rights, in connection with that name or a similar name, to challenge the granting of the name under clause 70. Accordingly, amendment No. 129 seeks to clarify the point to avoid any confusion.
Clause 68 gives the Secretary of State power to direct a company to change its name if it has been registered in a name that is the same as, or in the opinion of the Secretary of State, too like a name appearing on the register or a name that should have appeared on the register. My concern is the last point: which names should appear on the registrar’s index of companies that are not there? Amendment No. 130 seeks the deletion of those words, but I would in any event be interested to hear from the Minister the circumstances that are contemplated by them. It seems odd to legislate for something that should be there but is not. I certainly would not wish to set a dangerous precedent for other legislation by letting this pass me by; hence the reason for flagging up the point and tabling the amendment.
I would also be interested in the Minister’s views on how the clause would interrelate with clause 70 and the mechanism for the new company names adjudicator. Is it envisaged that a party could apply to the Secretary of State under clause 68 and to the adjudicator under clause 70 at the same time? Who would take precedence in such a situation? How would any issues or disputes be resolved if a twin-track approach were taken? It is worth gaining clarity on the issue so that we can best understand the interrelationship between the two different regimes. It appears that they could be used on the same occasion, and that could lead to confusion.
Amendment No. 131, the words of which are repeated in some subsequent amendments, seeks to impose uniformity on the form that a direction from the Secretary of State should take. I mentioned earlier that clause 65 makes it clear that a direction from the Secretary of State in that context should be in writing, and I note that clause 75 also specifies that a direction should be in writing, yet that requirement is missing here. I believe that all such directions should be written, given the potential sanction imposed for a breach. Amendment No. 131 would address that point.
Clause 70 relates to the new mechanism to enable a person to raise with one of the new company names adjudicators an objection to a company using a particular name. Before developing some points and discussing the amendments proposed to the clause, I want to say that I welcome the concept of creating a means of challenge and the ideas that lie behind the clause and the various provisions that feed into it. There are cases of names being used inappropriately and companies to a certain extent being held to ransom, so it is important that there is a means of more direct redress in the Bill. However, my comments will relate to the mechanics of the structure in the Bill. As currently drawn, that may be somewhat cumbersome and time consuming and may lead to unintended consequences.
Let me deal with a more technical point first. Amendment No. 132 is designed to clarify that, for a person to object, the company does not have to have exactly the same name, which is what the wording of clause 70(1)(a) seems to suggest. The amendment would make it clear that, if a company had incorporated a name associated with the applicant in which he had goodwill, that would give grounds for an objection. Another aspect that concerns me is that there appears to be no requirement for the applicant seeking to raise an objection to have any current or direct interest in the UK.
I shall give an example and I hope that you will excuse me, Mr. Illsley, if I take your name in vain for this limited purpose. Illsley Retailers could be a large international company that had not yet established a presence in the UK. Illsley Retailers Ltd. could be a small high street store—say on Hornchurch high street in my constituency—which has just set itself up, completely oblivious of the existence of Illsley Retailers, the large international concern. The international company is able to show that it has goodwill in its name and that the name of Illsley Retailers Ltd. is sufficiently similar to suggest a connection with the international company, thereby, in my view, satisfying clause 70(1) and enabling the large international company to argue that it is considering establishing a new chain of stores in the UK, giving it the potential right to raise an objection.
If that happened, the now quaking Illsley Retailers Ltd.—the new and small UK company with only limited resources available to demonstrate its situation under clause 70(4) so as to fend off the objection being upheld automatically—would have to try to demonstrate that it did not know of the large international company so as to deprive it if it subsequently wanted to register the name. The costs of that could be significant, and there might be an inequality of arms between the parties that could lead to the smaller firm being intimidated into changing its name, even though it did not intend to contravene clause 70 and even though that action would cause damage to its own goodwill.
I give that example with regard to ensuring that there is a direct link to the UK. I think that the intention behind the drafting is to deal with issues of uncertainty and with something that is misleading. However, the existing wording does not seem right to me, so amendments Nos. 133 and 134 are designed to make it clear that there has to be a strong connection between the applicant and its use of its name and goodwill in the UK.
It also seems odd that the right of objection is completely open ended. There is no limitation period at all, and I believe that an appropriate long-stop date for a challenge should be incorporated to provide certainty about this area of law and to facilitate speed of administration in respect of company names and their use. Amendment No. 135 therefore proposes a limitation period of 12 months from the date of registration of the offending company name.
Amendment No. 137 is a technical amendment to ensure that the definition of “goodwill” in clause 70(7) also applies to clause 73 where it is also used. However, it would be helpful if the Minister could tell us whether any further guidance will be forthcoming on the meaning of “goodwill” as referred to in this subsection as the CBI has stated that it would be useful to give a clearer indication as to the matters that would be covered. For example, would a registered trademark currently in use be regarded as meeting the definition? It would certainly be helpful if some further clarification or guidance could be offered.
Amendment No. 60 seeks to clarify the reference to “start-up costs” in clause 70(4)(b)(ii) and to give some context to the term by making reference to the company’s annual revenue and assets. Without this, it seems that the reference to start-up costs could be highly subjective and uncertain, and I note that the Secretary of State has not reserved a specific right to give guidance on this term under clause 72.
We come back to amendment No. 136 and the insertion of a new mechanism for seeking an interim order. These new provisions are intended to address what I see as one of the real loopholes that the current law allows and that the Government’s proposals appear to fail to address adequately and in a timely manner even though this is precisely the type of case that the mechanism is intended to address.
Let us take the example of a public company that is in the middle of a transaction, such as a reverse takeover where it is acquiring another company, part and parcel of which will incorporate a resolution approving that transaction. In the light of the different status of the new enlarged company, it might to seek to change its name at the same time and will therefore issue a circular to its shareholders seeking the permission to proceed with the transaction, but also seeking permission to change its name. Therefore a document is published, a circular is sent to shareholders giving the background to the transaction and also seeking their approval to pass a special resolution to change the name of the company.
In those circumstances what commonly happens is that a separate limited liability company is set up and the resolution is passed and a similar resolution is also passed in the new limited liability company. Both resolutions and the supporting documentation are filed at the same time with the registrar of companies so, in essence, there is a simultaneous change of name. There is therefore no doubt that the new plc seeking to change its name is not entitled to do so by virtue of an existing company having the self-same name on the index of companies maintained by the registrar.
However, that does not always happen. I am aware of circumstances from my experience before entering the House where the limited liability company may not have been established. There are people who monitor such issues quite carefully and who then establish a new limited liability company using the name that the public company was seeking to adopt following on from the change of name. Challenges have been brought through legal proceedings, but customarily in those circumstances, given the possible time constraints and the potential embarrassment to any parties involved, a commercial arrangement is reached to secure the name that the plc was seeking to adopt by virtue of its proposals.
Clearly, as the timetable for an EGM is 21 days, that does not give a huge amount of time to make any changes and to ensure that one can secure the new name after the successful passing of the resolution by the shareholders. Obviously when one is talking about a plc, one is talking about filing with the London stock exchange and therefore the high-profile nature of what is contemplated.
Under the current procedure, one is required to seek the permission of the company names adjudicator to change a name. It seems that one would have to go to court if the name was not changed; there is no automatic provision for an offending company to change its name. The risk is that it could be expensive for relevant companies, hence the proposal for an interim order procedure as proposed in amendment No. 136.
I do not intend to take up the Committee’s time going through the provisions of amendment No. 136 in detail, but in essence it would allow a plc to challenge the use or registration of the new name if it took place after the publication of the relevant circular. It would ensure a swift challenge. The mechanism would allow a means of addressing the ills that are likely to occur within the likely time scale.
It is a question of balancing the risk. Amendments Nos. 136, 138 and 139 would allow that to be done more effectively. It is worth noting that if there was a subsequent dispute about who has goodwill and so on, it would be possible to seek a challenge through other procedures contained in the Bill.
I appreciate that I have already taken some time, but I want to deal briefly with some concerns raised by the CBI in connection with clause 70, which are dealt with in amendments Nos. 252, 253 and 264. Amendments Nos. 252 and 253 seek to make a further addition to clause 70(5). That clause deals with a situation in which the main purpose of registering a name is to obtain money or other consideration from the applicant, or to prevent him from registering the name. In those circumstances, even if the relevant exemptions in paragraphs (a), (b) or (c) of subsection (4) would otherwise apply, an objection to a company names adjudicator would be upheld.
However, the CBI believes that further amendment is necessary to mitigate the impact of the exemption in clause 70(4)(b)(ii) that a company is already operating under a relevant name. Amendments Nos. 252 and 253 would provide for a situation where consumers and members of the public, and those actually dealing with or trading with a company, could be misled into thinking that they were receiving information about or dealing with a well-known company when they were not.
The CBI states that if such a change was adopted, it would save many well-known companies significant amounts of management time and costs often exceeding £100,000 each year in getting misleading company names withdrawn or changed. Although some remedies exist in law for passing off and for breach of trademark, companies will save significant sums if company law is brought to bear and made more effective. It would also help legitimate companies rightly concerned about damage to their reputation.
Amendment No. 264 makes a slightly different point, as it addresses the potential orders that a company names adjudicator could make. The CBI describes the current order-making power as “seriously inadequate”. In many cases, the goodwill attached to a name applies only in a particular field or area of business that reflects the type of activities undertaken by the relevant company. Except when a name is particularly well-known, the use of a name outside a specified area of activity may not be said to mislead.
Amendment No. 264 would therefore give the adjudicator discretion in appropriate cases to allow the respondent company to retain the disputed name as its own, but on the condition that it is required not to operate in the relevant fields of activity if confusion could arise as a result of the applicant’s goodwill in that particular business area. That seems a practical proposal which would address the concerns of the applicant, yet it would not unduly penalise a respondent company.

Quentin Davies: I want to speak to amendments Nos. 252 and 253 in my name. I am grateful to my Front-Bench colleagues for having added their names to those amendments.
As my hon. Friend said, clause 70 in its present form is somewhat inadequate. Subsection (1)(b) provides some protection for a company that finds someone else using its name or a name very close to it such that potential customers are easily deceived into believing that they are dealing with a company whose goodwill already exits, when in fact they are not. That is a real danger that we come across in many contexts, and which gets worse with the growth of internet trading. Company law should provide a protection or remedy against that.
Clause 70 is rather convoluted. It starts by stating that there will be some protection, but then withdraws a lot of that in subsection (4), which provides for six grounds—I think—on which a company complained against for having borrowed another company’s name or for trading under one that is excessively close to it, can raise an excuse. If they can do that, there is no such protection for the person complaining. That is not adequate.
Subsection (5) then adds a new protection against explicit intent to blackmail a company with substantial goodwill by setting up and trading under another with the same or similar name simply to force the first company to buy it in. It is in the public interest to exclude such blackmail or greenmail, which is the purpose of subsection (5).
The provisions do not, however, go to the heart of the real abuse or evil. They do not mention public protection. As my hon. Friend mentioned, the CBI inspired such an initiative. Protection of the public is our greatest concern and we must address it. My amendment No. 253 therefore adds the criterion:
“if the activities of the company using the registered name would be likely to deceive members of the public or to cause loss or damage to persons dealing with the company.”.
That is the essence of the abuse, against which the public need to be protected, and it needs to be in clause 70 explicitly and none of the potential excuses in subsection (4) should be able to override it.
I hope that the Committee agrees that the amendment is sensible and makes it clear what the main purpose of the protection should be. The clause does not mention public interest, and it should. So far, protection in company law against that form of abuse is inadequate.

Vera Baird: I am grateful for the clarity with which Opposition Members have reasoned their amendments. I shall start by separating the purposes of clauses 67 and 70. I think that that is where the hon. Member for Hornchurch started.
Clause 67 provides the rules under which a proposed name is to be compared with existing names to determine whether it is the same and thus should be prohibited. For example, “bricks and mortar” would be treated as being the same as “brick sand mortar”, and therefore the second name would not be permitted. It would not even make it on to the register. That is the important point.
Clause 70 provides for objections to a name already registered on the grounds that it either is the same as the name in which the objector has goodwill, or is so similar as to suggest a connection between the company and the objector. I agree that it would be wrong if the rules under clause 67 restricted the scope of objections under clause 70. However, the purpose of clause 70 is to provide for objections to names already permitted—it has got over the hurdles in clause 67—so I think that the drafting is clear.
Amendment No. 130 focuses on a real difficulty with rules on company names regarding names that should have been on the register, but were not. I was asked about how that situation could arise. I suppose the subtext could be, “Was it because of inefficiency?” Perhaps, that was implied in the question.

It being twenty-five minutes past Ten o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.